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SB 3872

PROP TX-FREE AND CLEAR EXEMPT

104th Regular Session Introduced by Darby Hills and 4 co-sponsors

Creates a free and clear senior homestead exemption for qualifying 75+ homeowners with low income, applying to primary residences from 2027.

Added as Co-Sponsor Sen. Dave Syverson
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WeVote Research Nonpartisan
Bill Summary · SB 3872

Overview

SB3872, introduced in the 104th Illinois General Assembly by Senator Craig Wilcox (with co-sponsor Senator Jason Plummer), creates a new “free and clear senior homestead exemption” within the Property Tax Code. The exemption would apply to qualifying senior homeowners beginning in tax year 2027, providing a targeted property tax reduction for eligible elderly homeowners with limited income and who own and occupy a primary residence.

Purpose and Intent

  • Establish a dedicated property tax exemption for seniors aged 75 and older who have household income at or below a defined limit.
  • Provide tax relief on the homeowner’s primary residence, aiming to reduce tax burdens for low- to moderate-income elderly residents.
  • Expand protections for qualifying seniors who transition into life care facilities or certain licensed care settings, ensuring continued tax relief when residence circumstances change but ownership remains with the qualifying person.

Key Provisions and Changes

  • Section Created: Adds 35 ILCS 200/15-171 (free and clear senior homestead exemption).
  • Effective Date: Beginning in taxable year 2027.
  • Eligible Property: “Qualified senior homestead property” is defined as homestead property used as the primary residence by a qualifying senior citizen who has an ownership interest and is liable for property taxes. It must not be used by a student in a qualifying school or community college district and must be free of certain liens (e.g., mortgage, HELOC, reverse mortgage).
  • Calculation of Exemption:
    • For land with a cooperative apartment building: the maximum reduction from property value (as equalized) is multiplied by the number of apartments occupied by a qualified senior.
    • For land with a life care facility: the maximum reduction is multiplied by the number of units occupied by a qualified senior.
    • If the exemption is granted in a cooperative or life care facility, the savings must be credited by the management to the apportioned tax liability of each qualifying resident. Refusal to credit the savings can result in a Class B misdemeanor.
  • Lifetime/Continuation of Exemption:
    • If a qualifying senior later resides in a facility licensed under various Illinois long-term care or housing acts, the exemption continues as long as the spouse (if 75+) occupies the residence or the residence remains unoccupied but still owned by the qualifying person.
  • Administration and Verification:
    • Assessors or chief county assessment officers may determine eligibility of facilities via affidavit, application, visual inspection, questionnaire, or other reasonable methods.
    • The assessor may request proof that savings are credited to the individual resident’s apportioned tax liability.
  • Definitions and Baseline Terms:
    • Includes specifics on the Consumer Price Index, “household income,” and “maximum income limitation.”
    • Maximum income limitation starts at $100,000 for 2027 and then adjusts in subsequent years by CPI-based increases.
    • “Qualified senior citizen” = age 75+ on Jan 1 of the tax year and household income within the limit.
    • “Qualified senior homestead property” = primary residence with ownership, not used by a student in a district, and free of liens.

Affected Parties

  • Primary: Senior homeowners aged 75 and older, with household income at or below the specified maximum.
  • Property Owners in Cooperatives or Life Care Facilities: Eligible residents can receive an exemption tied to occupancy units; these entities must credit the tax savings to residents’ apportioned tax liabilities.
  • Assessors and County Officials: Responsible for determining eligibility, verifying crediting of exemption savings, and overseeing compliance.
  • Care Facilities: Life care facilities and related cooperatives may be required to administer or facilitate the allocation of exemption benefits.

Procedural and Timeline Considerations

  • Effective Tax Year: 2027 for the exemption to begin.
  • Ongoing administration: Requires cooperation from cooperative associations, life care facility management, and tax assessors to implement and monitor credits and compliance.
  • Enforcement: Non-compliance with crediting exemption savings to residents can trigger Class B misdemeanor penalties.

Potential Impacts

  • Tax Relief: Provides targeted property tax relief for qualifying seniors, potentially reducing annual tax bills for eligible homeowners.
  • Administrative Burden: Adds verification and crediting requirements for facilities and assessors, with potential administrative costs and compliance checks.
  • Policy Design Considerations: CPI-based income limit adjustments help maintain affordability over time but introduce year-to-year variability in eligibility.

If you’d like, I can extract the exact statutory definitions (e.g., “household income,” “maximum income limitation”) into a quick reference sheet or compare this proposal to existing Illinois senior exemptions.

Compiled from official sources — confirm details with the bill’s official record.

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